The Interfaith Center on Corporate Responsibility (ICCR), a coalition of 300 investors with assets under management of over $100 billion, Calvert Investments and Christian Brothers Investment Services, commend Congresswoman Carolyn Maloney (D-NY) and Congressman Chris Smith (R-NJ) for her introduction of The Business Supply Chain Transparency on Trafficking & Slavery Act of 2015 in the House of Representatives.
The bill was introduced following publication of the State Department’s 2015 Trafficking in Persons report, which called on governments to “set clear expectations for businesses on human rights issues and adopt policies that promote greater transparency and better reporting on anti-trafficking efforts in supply chains.”
ICCR also supports Senator Richard Blumenthal’s (D-CT) forthcoming companion bill to be introduced in the Senate shortly.
The identical bills would require public disclosures to the Security and Exchange Commission regarding auditing and verification procedures, risk assessments, training, remediation plans and accountability mechanisms that address trafficking and slavery risks. If enacted, the bills would apply to all publicly traded or private entities in every sector and, consequently, would have broad international impact. According to David M. Schilling, senior program director of ICCR,
This act is a real game-changer that is much needed by consumers, investors and most importantly, those who have been made victims by human traffickers. This would require corporate reporting on human rights risks within their extended supply chains down to the commodity level.
Stated Julie Tanner, assistant director of Catholic responsible investing, Christian Brothers Investment Services,
Companies without a clearly formulated, comprehensive and proactive approach, leave themselves open to a variety of risks, including reputational, legal, and regulatory risk. The disclosures required by these bills will provide investors with the information necessary to adequately evaluate risks to their portfolios and potential impacts to shareholder value.
The Maloney bill builds on The California Transparency in Supply Chains Act, which took effect on January 1, 2012 and applies to manufacturers and retailers doing business in the state.
In addition, the recent release on March 2, 2015 by the Federal Acquisition Registry of the rules related to President Obama’s Executive Order raises the bar by requiring all companies with government contracts to certify that they have done their due diligence in confronting and remediating human trafficking and slavery in their extended supply chain.
A similar law in the UK, the Modern Slavery Act of 2015 calls for corporate disclosure on human trafficking mitigation efforts. The law includes a Transparency in Supply Chains clause encouraging business to take action to ensure their end-to-end supply chains are slavery free. Mike Lombardo, Senior Sustainability Analyst and Manager, Index, Calvert Investments, added the following:
Human trafficking is a growing problem within global supply chains. If enacted, this law will raise the bar on corporate disclosure and investors will be better positioned to more effectively assess how companies are managing these risks. The UN Guiding Principles on Business and Human Rights clearly spells out the responsibility of companies to respect human rights, which includes reporting on what a company is doing to assess and address incidents of trafficking throughout its supply chain.
“Beyond a company’s required regulatory and legislative compliance lies a clear moral mandate: safeguarding human rights is everyone’s business,” said David Schilling. “As faith-based and responsible investors we view this mandate as fundamental for companies to retain their social license to operate.”
ICCR applauds the leadership of Congresswoman Maloney and Congressman Smith in introducing the Supply Chain Transparency on Trafficking & Slavery Act. The pervasiveness of trafficking and slavery require effective legislation that moves beyond voluntary disclosures and levels the playing field for all companies. We strongly urge members of Congress to co-sponsor this bill.
The bill targets publicly-traded companies with more than $100 million in global gross receipts. They would be required to include in their annual reports to the SEC a notification of any efforts to prevent slavery in their product supply chains. Disclosures would be posted on the SEC and company websites for public access.
I believe the bill may be heard next by the House Committee on Education and the Workforce: Subcommittee on Workforce Protections. If you live in the 7th Congressional District of Michigan it would be very helpful if you would contact your representative Congressman Tim Walberg and ask him to move the Business Supply Chain Transparency on Trafficking & Slavery Act of 2015.
The Interfaith Center on Corporate Responsibility (ICCR) Currently celebrating its 44th year, ICCR is the pioneer coalition of active shareholders who view the management of their investments as a catalyst for change. Its 300 member organizations withover $100 billion in AUM have an enduring record of corporate engagement that has demonstrated influence on policies promoting justice and sustainability in the world.